What to do with the toxic debt

The issue of how to tackle the vast quantities of impaired assets lingering on banks' balance sheets has given rise to several possible solutions, chief among which is the notion of a 'bad bank'. Credit asks five market participants how such a scheme might work

The nature - if not the effect - of various governments' plans to address the volume of toxic assets in the financial system is becoming clearer. They all have in common the twin aims of freeing up liquidity to benefit both private and commercial borrowers, and of rescuing those financial institutions deemed essential to the economic, and perhaps political, stability of the countries concerned.

As the economic picture worsens globally and politicians recognise that they are in the midst of what